Naira Gains on Increased Dollar Supply

The naira gained 0.11 per cent against the United States currency on the interbank market yesterday, supported by inflows from lenders selling dollars to stay within a regulatory limit for holding hard currencies, dealers said.

The unit closed at N161.90 to the dollar, up from N162.07 it closed on Friday, Reuters revealed.

The naira eased to a five-week low against the greenback two weeks ago but recovered some ground last week after dollar sales by some oil companies, including state-owned energy firm NNPC.

Dealers expect some oil companies to supply dollars this week, meaning that the naira may see further support.

Nigeria’s inflation rate advanced for a fifth month in July, to 8.3 per cent from 8.2 per cent a month earlier, the National Bureau of Statistics said yesterday.

Analysts argued that the overall details of the inflation figures suggest that inflationary pressures may be moderating.

“Surprisingly, given the overlap between Ramadan and July, food prices did not appear especially pressured. (This is not atypical for Nigeria which tends to buck the global trend in this respect).

“There are some signs that core inflation is moderating. Core CPI eased to 7.1 year-on-year in July, rising only 0.2 per cent month-on-month. This was due to slower price increases in a range of items – including clothing and footwear, housing, water and electricity and gas and other fuel.